New | Beijing not likely to lift restrictions on overseas investments
Anti-graft campaign has revealed overseas accounts held by corrupt officials, so Beijing reluctant to broaden the possibilities
In light of President Xi Jinping’s anti-corruption campaign, which has unveiled officials with all kinds of investments and holdings, China is unlikely to ease its restrictions on overseas investments by individuals in the near future, state media said.
Regulators worry that if the restriction were lifted, the outflow of domestic capital would offer opportunities for corrupt officials to launder their assets overseas, said China Economic Weekly, a financial magazine owned by Communist Party mouthpiece People’s Daily, quoting an unnamed source who it says is knowledgeable about the situation.
The National Development and Reform Commission, China’s top economic planner, said in a long report on its website two weeks ago that “the next step is to improve relevant regulations on utilisation of foreign capital and overseas investments, and allow individual investors to make overseas investments”.
Without elaborating when and how that will happen, the report lifted some hopes that the government will soon raise its limit on individual overseas investment. The current law limits foreign currency transfers by individuals to US$50,000 a year.
In a recent twist, state broadcaster China Central Television (CCTV) aired a programme in July, accusing the Bank of China (BOC) of helping rich clients transfer money abroad through one of its services, which violated the foreign exchange regulations.
Although BOC claimed the service was a legitimate pilot programme of which regulators were made aware, the allegation by CCTV against the country’s fourth-biggest lender struck a nerve, especially in a country where it is an open secret that corrupt officials move billions of US dollars gained from malfeasance to offshore accounts or use it to buy property.